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Thread: Why Supply-Side Economics Is Right And Keynesian Economics Is Wrong

  1. #31
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    Quote Originally Posted by Panzareta View Post
    I paid for my SS/Medicare which are entrusted to the Gov for safe keeping until I qualify. So you are admitting you are being dishonest with your figures? Next you be telling us you are a libertarian.
    You fund food stamps too, not really the issue. Indeed, taxpayers fund the government. Actually its a PAYGO system, but nobody excludes Social Security from total government spending.

  2. #32
    Veteran Member Panzareta's Avatar
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    Quote Originally Posted by publius3 View Post
    Acrually its a PAYGO system, but nobody excludes Social Security from total government spending.
    Then you are comparing apples to oranges. Do savings bond holders also get counted as gov spending? I'm sure the gov also makes a little off of them,
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  3. #33
    Veteran Member Panzareta's Avatar
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    Quote Originally Posted by publius3 View Post
    You fund food stamps too, not really the issue. Indeed, taxpayers fund the government. Actually its a PAYGO system, but nobody excludes Social Security from total government spending.
    Is there an age where you automatically qualify for food stamps? I seemed to have missed that. .

    Is a tax refund also counted as gov spending?
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  4. #34
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    Quote Originally Posted by Panzareta View Post
    Then you are comparing apples to oranges. Do savings bond holders also get counted as gov spending? I'm sure the gov also makes a little off of them,
    Well when they buy the bond, the money goes to the government and they spend it, that counts.

  5. #35
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    Quote Originally Posted by Panzareta View Post
    Is there an age where you automatically qualify for food stamps? I seemed to have missed that. .

    Is a tax refund also counted as gov spending?
    IMF/World Bank use that measure, if you personally want to break out the figure, feel free.

  6. #36
    Member Claudius the God's Avatar
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    We need to stop labeling all government expenditures as equal in terms of the tax code or value to the citizens. SS is paid for by payroll taxes and has a large debt owed to it by the government for the accumulated surplus's it has generated over the years. Going forward, it can be fully funded by raising the taxable limits. Here is a breakdown of tax revenue by source.

    https://www.usgovernmentrevenue.com/...d&meta=pie_fed

    34% of our federal tax revenue comes from SS taxes. 60% comes from income taxes, business taxes around 2% and other around 6% for a total of 3.654 Trillion in tax revenue.

    Lets go to the expenses or spending budget.

    Pie chart of 'federal spending' circulating on the Internet is misleading | PolitiFact

    If you scroll down the article you will get to a chart called "percent of spending including discretionary and mandatory spending". In that chart you will see that health (Medicare and Medicaid) takes up 28%, SS another 25.3%, military and homeland security 16.2% and the rest is what most of us call the government. When people say they want to cut spending, which one of these do you want to cut? The sad fact is that we have very few prudent options. If we cut taxes without cutting spending, we increase the deficit. If we cut taxes and cut spending, the only place to go is health. If we raise taxes and cut spending, we still have to raid health. If we raise taxes and raise spending, we might narrow the gap but we will still have a gap.

    Clever politicians get around these bad choices by overstating growth targets to kick the can down the road. Some economists say deficits don't really matter in a fiat economy like ours. Some economists predict default if we continue. What is the right course of action?

    The only place to save money is in health. That was the reason Obama went after that industry with the ACA. We cannot tell seniors to buy their own insurance. Republicans want to push the poor off Medicaid. SS pays for itself. The military is a big part of this budget but even if it went to zero we would still be in a deficit situation. Decades of low taxation at the federal levels pushed states to make up for that revenue sharing locally. Most of us pay pretty high state and local taxes even in the no income tax states. They get their money one way or the other. Some states are generous, some are miserly. Asking states to survive by dropping the federal tax sharing monies is a race to the bottom, we will all be like Kansas or Mississippi with this plan. So what do we do?

    Clever economists such as Stephanie Kelton do have ideas on how to manage this situation. It means that we have to fundamentally rethink our relationship with fiat money. Her voice is unknown in policy circles where traditional economists preach one gospel or the other ignoring the reality of the problem by confusing us with jargon and dogma. This is not a simple problem to fix. The two parties have done us all a huge disservice by maintaining rigid positions as if they were tablets in stone. We need to think out of the box if we are ever going to resolve this mess. One thing is certain, no senior is going to give up Medicare and SS. The poor will only get more poor and more desperate if we slash Medicaid. The military seems here to stay, we are the policeman of the world. The rest of government pales in comparison to the big four areas.

  7. #37
    Southern Strategy Liberal OldGaffer's Avatar
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    One thing is certain, no senior is going to give up Medicare and SS. The poor will only get more poor and more desperate if we slash Medicaid. The military seems here to stay, we are the policeman of the world. The rest of government pales in comparison to the big four areas.
    This is the problem, and cutting government and taxes is not the solution.
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  8. #38
    Member Claudius the God's Avatar
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    Quote Originally Posted by OldGaffer View Post
    This is the problem, and cutting government and taxes is not the solution.
    The starkness of the situation is apparent to anyone who objectively looks at our federal spending and tax revenues. Corporate taxes make up a paltry 2% of the total, that number used to be much larger. If you want revenue, get it from those with all the money. As for expenses, there simply is no where to cut except at the margins. This simple fact eludes every single person who thinks our government can cut its way to solve the debt overhang. It may be that debt at the national level is not really that important. After all, whenever the government is run by deficit hawks they increase the debt every single time. It is more of a political problem than an economic problem. Lets cut the dogma, drop the labels and get on the same page. Only then can we come up with a new way of looking at our taxes and revenues.
    Thanks from Friday13 and labrea

  9. #39
    Spock of Vulcan Ian Jeffrey's Avatar
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    Quote Originally Posted by publius3 View Post
    It'd be difficult to say that we cannot emulate the proportionate size of the Swiss government when in fact the US had a proportionally smaller government for the majority of its post-ww2 existence.
    The world has changed dramatically just in the last 20-25 years. I was there for it.
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  10. #40
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    Quote Originally Posted by publius3 View Post
    No, you didn't unless you were around during WW2. The government now consumes 40% of GDP, a post WW2 high.
    The Obamaconomy received fiscal and monetary stimulus that was more than twice the cost to the US to fight WWII, in today's dollars.

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